27 unchanged sentences
Risk ratings are adjusted as necessary.
−Removed: Risk ratings are reviewed by both the Company’s independent third-party credit examiners and bank examiners from the DBO and FDIC.
+Added: Risk ratings are reviewed by both the Company’s independent third-party credit examiners and bank examiners from the DFPI and FDIC.
Based on the risk rating system, specific allowances are established in cases where management has identified significant conditions or circumstances related to a credit that management believes indicates that the loan or lease is impaired and there is a probability of loss.
3 unchanged sentences
In this second phase, groups of loans & leases with similar characteristics are reviewed and the appropriate allowance factor is applied based on the historical average charge-off rate for each particular group of loans or leases.
−Removed: Part 2 - considers qualitative internal and external factors that may affect a loan or lease’s collectability, based upon management’s evaluation of various conditions, the effects of which are not directly measured in the determination of the historical and specific allowances.
+Added: Part 2 - considers qualitative internal and external factors that may affect a loan or lease’s collectability, is based upon management’s evaluation of various conditions, the effects of which are not directly measured in the determination of the historical and specific allowances.
The evaluation of the inherent loss with respect to these conditions is subject to a higher degree of uncertainty because they are not identified with specific problem credits or portfolio segments.
9 unchanged sentences
(1) economic conditions in the Central Valley;
−Removed: (2) the long-term risks associated with the availability of water in the Central Valley;
+Added: and (2) the long-term risks associated with the availability of water in the Central Valley;
and (3) the impact of COVID-19.
2 unchanged sentences
Where any of these conditions is not evidenced by a specifically identifiable impaired credit or portfolio segment as of the evaluation date, management’s evaluation of the inherent loss related to such condition is reflected in the second element of the allowance or in the unallocated allowance.
−Removed: Management believes, that based upon the preceding methodology, and using information currently available, the allowance for credit losses at June 30, 2020 was adequate.
+Added: Management believes, that based upon the preceding methodology, and using information currently available, the allowance for credit losses at September 30, 2020, was adequate.
No assurances can be given that future events may not result in increases in delinquencies, non-performing loans & leases, or net loan & lease charge-offs that would require increases in the provision for credit losses and thereby adversely affect the results of operations.
21 unchanged sentences
Results that exceed policy limits, if any, are analyzed for risk tolerance and reported to the Board with appropriate recommendations.
−Removed: At June 30, 2020, the Company’s estimated net interest income sensitivity to changes in interest rates, as a percent of net interest income was a decrease in net interest income of .02% if rates increase by 200 basis points and an increase in net interest income of .60% if rates decline 100 basis points.
+Added: At September 30, 2020, the Company’s estimated net interest income sensitivity to changes in interest rates, as a percent of net interest income was a increase in net interest income of .50% if rates increase by 200 basis points and an increase in net interest income of .80% if rates decline 100 basis points.
Comparatively, at December 31, 2019, the Company’s estimated net interest income sensitivity to changes in interest rates, as a percent of net interest income was an increase in net interest income of 2.0% if rates increase by 200 basis points and a decrease in net interest income of 2.0% if rates decline 100 basis points.
14 unchanged sentences
To supplement these operating sources of funds the Company maintains Federal Funds credit lines of $78 million and repurchase lines of $112 million with major banks.
−Removed: As of June 30, 2020, the Company has additional borrowing capacity of $622.7 million with the FHLB and $423.7 million with the FRB.
+Added: As of September 30, 2020, the Company has additional borrowing capacity of $608.9 million with the FHLB and $446.3 million with the FRB.
Borrowings under these lines are collateralized with loans or securities that have been accepted for pledging at the FHLB and FRB.
−Removed: At June 30, 2020, the Company had available sources of liquidity, which included cash and cash equivalents and unpledged investment securities AFS of approximately $591.3 million, which represents 13.89% of total assets.
+Added: At September 30, 2020, the Company had available sources of liquidity, which included cash and cash equivalents and unpledged investment securities AFS of approximately $378.2 million, which represents 8.79% of total assets.
- Management’s Discussion and Analysis - COVID-19 (Coronavirus) Disclosure” for a discussion of how COVID-19 may impact liquidity risk.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.